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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121061  
Subject: Re: Early withdrawal from convetional IRA Date: 12/1/2009 7:20 PM
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I was thinking about withdrawing $25,000 from my $82,000 IRA to pay off debt.

Just be aware that after taxes, and if you have any other income, a $25k withdrawal will probably only be able to pay off $19k - $21k in debt - less if you have a state income tax.

I heard that being disabled is one of the exeptions from the 10% penalty. is this true, and what are the rules?

Yes. From IRS Pub 590 http://www.irs.gov/pub/irs-pdf/p590.pdf

Disabled. If you become disabled before you reach age 59½, any distributions from your traditional IRA because of your disability are not subject to the 10% additional tax.

You are considered disabled if you can furnish proof that you cannot do any substantial gainful activity because of your physical or mental condition. A physician must determine that your condition can be expected to result in death or to be of long, continued, and indefinite duration.


AJ
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